We recently compiled a list of the 10 Best Casino Stocks that Pay Dividends. In this article, we will have a look at where Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) ranks among other casino stocks that pay dividends.
The casino industry is making a comeback after the setbacks caused by the pandemic in 2020. It took a while for the sector to recover, with several factors at play, but the rebound is now clear with the easing of social distancing measures. Data from the Gaming Inspection and Coordination Bureau showed that Macau’s gaming revenue surged by 14.8% in August this year, surpassing expectations. The increase in demand for entertainment during China’s summer vacation has driven growth in the world’s largest casino hub. Casino stocks fall under the larger leisure and hospitality sector and are affected by a range of influences, such as the state of the economy, consumer spending habits, and changes in gambling regulations.
Also read: 10 Best Casino Stocks To Buy According to Analysts
Investor confidence in the casino industry has also skyrocketed, thanks to their ability to consistently hit it out of the park over the years. Casino revenues experienced a notable increase in 2023. Additionally, online casinos, which mainly gained importance during the pandemic, also posted record earnings last year. A report by the American Gaming Association (AGA) revealed that brick-and-mortar casino slots and table games generated a record $49.4 billion in 2023, marking a 3.3% increase over 2022. On the state level, 19 out of 27 traditional gaming markets achieved record annual revenues. Online casino revenue also surged in 2023, growing 22.9% year-over-year to $6.2 billion across the six states with fully legalized iGaming. The report further highlighted that 12 of the top 20 commercial casino gaming markets saw revenue growth, with the Las Vegas Strip leading the way with the most significant year-over-year gains.
The casino industry, like many others, is evolving quickly to keep up with current trends. In a recent move, Singapore has made changes to the Casino Control Act, allowing its two casinos to offer cashless gaming options, though cryptocurrencies will not be permitted, as reported by CNA. Cashless bets can be placed at gaming tables or machines by using virtual credits from cashless gaming accounts or e-wallets. This adjustment is the most recent update to casino regulations in Singapore, which had previously tightened rules by lowering the threshold for monitoring cash deposits at casinos to prevent misuse by terrorist and criminal groups.
The shift to cashless betting has highlighted people’s growing preference for digital platforms. The pandemic underscored the need for contactless options while still allowing people to enjoy these activities. Sports betting is also becoming more prominent since it operates through digital channels, providing a similar thrill to that of casinos. According to the AGA, while commercial gambling revenue is on the rise in most states where it’s legal, the growth in sports betting and online gambling is outstripping that of traditional casinos. So much so that it seems that Americans are withdrawing funds from their stock brokerage accounts to support their online betting habits. This is the main conclusion from a recent working paper titled Gambling Away Stability: Sports Betting’s Impact on Vulnerable Households. The paper suggests that for every dollar spent on sports betting, net investments in stocks and other financial assets decreased by just over $2. With that, we will now take a look at some of the best casino stocks that pay dividends.
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Our Methodology:
For this list, we scanned Insider Monkey’s database of Q2 2024 and selected companies that are involved in the casino and gambling industry. These companies own and operate casinos, resorts, and other gaming and entertainment facilities. From the resultant list, we picked the 10 best casino stocks that pay dividends to shareholders and ranked them in ascending order of the number of hedge funds having stakes in them as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
6. Gaming and Leisure Properties, Inc. (NASDAQ:GLPI)
Number of Hedge Fund Holders: 25
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) is an American real estate investment trust company that specializes in casino properties. In the most recent quarter, the company has shown its capability to explore innovative approaches to enhance shareholder value. Initially, it agreed to finance and manage a landside development project and hotel renovation for the Belle of Baton Rouge on behalf of its tenant, Casino Queen. This follows the successful earlier agreement to fund the landside relocation of The Queen Baton Rouge. Since the start of 2024, the stock has surged by nearly 4.5% and its 12-month return came in at over 6%.
In the second quarter of 2024, Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) reported a 6.7% YoY growth in revenues at $380.6 million. The revenue also beat analysts’ estimates by $2.74 million. The company continued to capitalize on its steady cash flow and benefit from its exceptional roster of leading operators in the gaming industry. Additionally, its ongoing success in expanding its tenant base highlights its opportunistic approach to portfolio growth and its ability to collaborate with current tenants to explore new and exciting expansion opportunities.
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) is also a strong company from a cash flow point of view. Its trailing twelve-month operating cash flow comes in at $1.03 billion and the levered free cash flow for the period is $285 million. The company ended the quarter with nearly $95 million available in cash and cash equivalents and its total assets amounted to over $11.7 billion.
On August 28, Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) declared a quarterly dividend of $0.76 per share, which was consistent with its previous dividend. Overall, the company has been growing its payouts for three consecutive years, which makes GLPI one of the best casino stocks on our list. As of September 12, the stock has a dividend yield of 5.84%.
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) was a part of 25 hedge fund portfolios at the end of Q2 2024, compared with 31 in the previous quarter, according to Insider Monkey’s database. The stakes held by these hedge funds have a total value of over $308.4 million. Ken Griffin’s Citadel Investment Group was the company’s largest stakeholder in Q2.
Overall, GLPI ranks 6th on our list. While we acknowledge the potential for GLPI to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GLPI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
